Video FAQs

An A-B trust is actually two trusts that are irrevocable. The combined trusts are an estate planning strategy employed by married couples for the purposes of avoiding death taxes and deferring death taxes. The strategy transfers the exemption equivalent a month amount into a trust that is deemed owned by the decedent, and the excess over the exemption amount into a trust that is for the benefit of the surviving spouse.

The A part of the trust, since it uses the equivalent amount, is never taxed. The B part of the trust, the taxes on those assets are deferred until the surviving spouse passes away.